Goonswarm Shocks EVE Markets

More evidence that an MMO can look like the real world! Compare the Enron saga to the following story sent in by Goonswarmer endie. Thanks endie!

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Basically, this is about some emergent gameplay that we in Goonswarm (it's always Goonswarm) are running right now.  It requires a touch of background for the non-Eve player, but is fairly easily comprehensible to the non-Eve constituency.  There are three basic things to understand:

1- In Eve, "POS Towers" (essentially small space stations) are at the core of much manufacturing, being used to react various compounds to make the building blocks of advanced construction.  Of the four Eve races' towers, by far the most efficient for this task are Gallente.  Gallente towers are thus used almost exclusively for high-end compound reactions.  Without the results of these reactions - many essential items from interdictors to jump freighters - simply cannot be built.

2 - Gallente towers use a specific type of ice which is predominately mined in Gallente empire space (it spawns in a few other places but is economically unrewarding to mine there until prices become vastly higher).  By filtering on various criteria, we were able to determine that only seventeen of all of Eve's thousands of systems were suitable for the methods used to mine almost all Gallente ice (automated botting by large numbers of ice-mining accounts).  I'll spare you the details of what those criteria were unless you are particularly interested.

3 - The automated bots use ships that themselves require at least thirty or so hours of mining to pay for their own capital investment, when fitted.  Ironically, they rely on CCP's own mechanics for protection: if you shoot them in empire space then "Concord" (an external, invincible force of NPCs: essentially town guards) will spawn very quickly and destroy you.  However, it is possible to fit certain ships so as to deal sufficient damage sufficiently rapidly to destroy one or more miners before Concord arrive.  For obvious and predictably tasteless Goonswarm-cultural reasons this is known as Jihading.

We have therefore announced and begun a campaign aimed at preventing anyone mining for Gallente ice in Empire space.  Since we have thousands of members, we have proved able to shut ice-mining operations down almost entirely.

Although prices have already risen dramatically and proceeded to fluctuate wildly (I can provide graphs if you want) we estimate that this is not yet because of a genuine shortage in reserves of ice, but mainly down to panic-buying, deliberate price tampering (by us: we bought up stocks in advance of the campaign) and short-term shortages.  We think that the lead time for buying is usually a week and that most major players have between two and three weeks of stocks in reserve.  After that is used-up the knock-on effect on a range of items will be fun to watch: unreacted moon minerals will drop; moon reaction output will rise; other components (such as datacores) used in "Tech 2" manufacturing will presumably fall, while the finished products will become more expensive.  This will affect virtually all of the hundreds of thousands of Eve accounts.

As someone working for an oil- and energy-market research company I've been watching the related price shock, market hysteria, speculation and rumour-fed manipulation with delight and a strong sense of déjà vu.  One post I made in the Goonswarm alliance director forums before we started kinda sums it up in formal terms:

"What [a fellow director] is saying is that while there is a limited degree of elasticity in supply, short- and medium-term spare capacity is inadequate to replace any interruption of current productive capacity, demand is extremely inelastic in the short term, bunkers are inadequate for any prolonged shortage and the cost of removing dependence is high both in immediate terms and in the context of ongoing costs. The market is therefore extremely vulnerable to price shock."

And there aren't many MMOs you can say that about.

***

No there aren't! But now if someone asks me whether an important policy and regulatory issue can be replicated in a virtual world, I can say that some players replicated energy market manipulation just for kicks.

 

Comments

[Alistair Riddoch]

1.

"He who controls the ice controls the universe".

[[email protected]]

2.

One thing that may have been missed by the planners is the effects of the price shock on economic choices made by players. Point 2 is that ice mining accounts take about 30 hours to pay off their capital costs; however, if the price spikes are significant enough, the profit point may shift down far enough to make automated farming valuable even at increased operating costs. If the ice price were to increase ten-fold, you would see a large number of players (non-bots) choose to ice mine in situations that are _normally_ more risky than botting, because their pay-off comes after only three hours.

If the eve market corrects like non-virtual-world markets do, then I would expect some major economic shifts similar shale sands exploitation as a reaction to increased oil cost.

[Stabs]

3.

Logging into Eve one sees the number of concurrent users. It seems to be higher since this started, in other words the excitement generated by this type of player power play generates more interest in the game.

(There are other possible explanations of the increased interest).

[Almo]

4.

Great game to be a part of.

[ecastronova]

5.

EVE has consistently broken new ground. They are now planning to
integrate the space game with a ground-based shooter. Amazing
possibilities.

[Nathan J. Evrard]

6.

I'm in complete in agreement with you on this one. In the post the author states that there are only 17 areas in Eve that are viable for the mining of the ice. However,now those other not so valuable areas are suddenly more valuable.

They've essentially created a market similar to what Debeers does in the real world with diamonds. That is to say that the rarity of something, rather real or perceived, directly correlates with it's value.

[I'm Also A Dick]

7.

All that to say you pulled a dick move on other players? Imagine if you put that much effort into real economics.

[bart]

8.

Not Just for kicks.

1bil isk buys you ~40$ of game-time.
And it wouldn't surprise me if they made 1000b manipulating the market.<--just guessing.

[shander]

9.

I've taken a 5 month break from the game, the timing of the break connected to some inane ideas leaked about how to implement MT in a way where game play convenience might be denied and parsed out incrementally (not for a flat "premium" fee), suggestions that players were a captive audience of friends who valued the real life friendships we'd made enough that they should be able to find ways to charge us more than a $15 a month subscription, and basic comments that even if things took small amounts of resources to change a matter of policy that they would not deviate from their scrum approach to make customers happy with small things.

But all that asside...

EVE is far and away the only game that allows relations of players to steer and shape a virtual world in ways were groups of players scaling in fractals from 3,s to a dozen to, 144 to 1000s (yes thousands working together... a thousand people spread only over 2 voice com systems...a person speaking to 1000 people all over the world once about entirely in game affairs (I remember that prior to the fountain final invasion)..

.. then these economics..
And smart professional people in all different fields (it feels like someone still in college is an outlier on the young side) bringing professional skills to the game....

I guess I 'll get back playing soon..

Being show a fixed bitmap of a door for 4 months with a steadfast bullheaded corporate decision to keep it rather than using one of thousands of other promotional images still leaves a bad taste in my mouth though. That they erred is forgivable,, that they refused to make readably attainable shift in the face or some players taking something wrong that wasn't vital to content is really not something I'll easily blow off.. I'm still perplexed by their notions (especially as the door was shown us at the time the CEO wrote an internal memo telling employees not to believe what players said, only how they acted)

[Endie]

10.

Welp that was just a kinda brief "are you interested if so I'll do a proper write-up for you" intro that I knocked up in ten minutes.

[Someone]

11.

The most plausible explanation is that you are a Goon propaganda agent.

In reality, the number of logged in players has not changed during this time. I have graphs to prove this.

Thx.

[Maya Rkell]

12.

Ha. Trust the goons to do this the hard way.

When I did it (and yes, the username MAY be slightly familiar to old time Eve-ers) with cash from a HAC producer, I just used the market and contacts with the three main ice mining syndicates.

It was cheap, and I kept it up for six weeks, running our targets through their stocks and making them easy prey. Annoyed the rest of Eve as well, they couldn't figure out the market shortage!

Oh, and as ever the botting is overstated in Empire and understated in 0.0 solo-farming.

[DMX]

13.

@Maya Rkell. I definately do remember the HAC market shenanigans that went on, prior to the changes in T2 blueprints that effectively broke up the BPO monopolies (I think the CCP/BOB BPO scandal really forced that.)

That was interesting, because HACs are probably one of the most fun ships in the game to play, combining the raw power of a battleship with the tactical manouverability of cruisers. A good HAC pilot can be a total terror against lesser mere mortals. But they where always expensive craft who's insurance value never quite matched the price one paid for the ship. The closest I ever saw to something matching that style of play was the old caracals which whilst flimsy could put out a fairly decent amount of firepower , although I never managed to keep one in one piece long enough to be particularly effective in it. Of course the king of the HACs wasn't even a HAC, it was in fact the Scimitar rigged together completely out of character into a multipurpose high-speed tanking tackling death dealer "comedy" setup. CCP nerfed those when they realised people where flying them as fighting ships instead of healer ships.

Because of this, controlling the HAC market effectively meant controlling certain types of gameplay, and this caused a lot of teeth gnashing and angst.

I really have no idea how this latest ploy is panning out. The economics of this game mystified me. I just liked playing a combat grunt.

One day I might have another go at this game. That day is not today however. Super-Capital ships kind of wrecked eve for me.

[Gavn]

14.

Posting to confirm that 99% of EVE Online players couldn't have cared less about the "GoonSwarm Ice Interdiction". I run several towers and my Corporation was not particularly affected.

What the MMO bloggers fail to realize is that, within the EVE Online community, GoonSwarm is old news and their antics are both tired and ineffectual. Why any blogger would rush to post some exaggerated account is beyond me.

[ecastronova]

15.

Well, all of this is old news if you're a gamer. If you're not, and many are not, the idea that people in a game would concoct a market manipulation scheme is actually interesting. Yes, even a decade or more after these things first started happening in virtual economies.